According to the United States Census Bureau, the city has a total area of 6.2 square miles (16.0 km2), of which 5.9 square miles (15.3 km2) is land and 0.27 square miles (0.7 km2), or 4.19%, is water.[1]

The first European in the area was possibly Joseph de La Roche Daillon, a missionary and explorer from Canada. La Roche reported on the presence of oil near Cuba, the first petroleum sighting in North America. At that time the area was a part of the territory of the Wenrohronon or Wenro Indians, an Iroquois speaking people. In 1643, the Wenro tribes became the first victims of a series of brutal conflicts known as the Second Beaver War.

The area was first settled by Europeans around 1765, called by the Indian name Ischua. The surface is a hilly upland, separated into two distinct parts by the valley of the Allegheny. The highest points are 500 to 600 feet (150 to 180 m) above the valley.

Originally the entire territory of the county of Cattaraugus was called the Town of Olean, formed March 11, 1808. As population allowed, the county was split in half and the top half was called "Ischua", and was taken off in 1812, a part of Perrysburgh in 1814, then Great Valley in 1818. Hinsdale formed in 1820, and Portville in 1837, leaving the current boundary of Olean that lies upon the south line of the county, near the southeast corner. The area remained sparsely populated until 1804, when Major Adam Hoops acquired the land and gave it its modern name. Hoops was a surveyor and Revolutionary War veteran, and was politically connected with Robert Morris, the financier of the Revolution. Along with Morris, Hoops became involved with the Holland Land Company, which was settling western New York.

This was a time of great western expansion into places like Ohio and Indiana. Since neither canals nor railroads had become widespread by this point, the main means of travel were either by cart or by small-boat travel. The Allegheny River was a major transportation route. Hoops believed that a great city could be created at the confluence of the Allegany and one of its tributaries, and went looking for the right spot. In 1804, he found one where Olean Creek meets the river, and received title to 20,000 acres (81 km2) from the Holland Land Company in 1804. Hoops' brother Robert came to the site and built the first permanent structure near today's Forness Park, calling the area Hamilton in honor of Alexander Hamilton.

Canandaigua, N.Y., April 15, 1804 "To Joseph ELLICOTT, Esq., Batavia, New York. Dear Sir,―It was proposed to me at New York to drop the Indian name of Ischue or Ischua (it is also spelt other ways). Confusion might arise from the various spellings, of which to obviate all risk I have concluded so to do as proposed. The neighborhood of the oil spring suggests a name different in sound, though perhaps not different in meaning, which I wish to adopt,―it is "Olean." You will do me a favor by assisting me to establish this name. It may easily be done now by your concurrence. The purpose will be most effectually answered by employing the term, when occasion requires, without saying anything of an intended change of name. To begin, you will greatly oblige me by addressing the first letter you may have occasion to write to me, after I receive the survey, to the Mouth of Olean. The bearer being properly instructed, there will be thereafter no difficulty. Your co-operation in the matter (the effect of which, though not important in itself, may be so on account of precision) will oblige. Your servant, A. HOOPS

Another claim is that Hoops named the area after one little girl named Olean Shepard, the first child of European descent born in the area. However, Olean Shepard's birthday was May 22, 1807, born well after the time when the area became known by the Olean moniker. Regardless of the origin, the Post Office recognized the new town as "Olean Point". The site was surveyed by 1808, and a map from that year shows a basic street pattern that still survives, along with most of the modern street names. In 1823, the city is called Olean, without the "Point", on county maps.

In 1854 Olean was formally incorporated by the New York State Legislature, and the trustees elected at the first subsequent town meeting were Dr. Lambert Thithney, C.B.B. Barse, Charles Thing, and John K. Comstock. Enos C. Brooks, descendant of Judge James Brooks and of Cornelius Brooks (one of the earliest settlers of Olean (1808)), was appointed Clerk of Olean.[3]

Adam Hoops's dream of creating a major transportation hub on the Allegany River — on the scale of a Buffalo or a Pittsburgh — was never realized, and he himself died in poverty. Nonetheless, Olean prospered and was soon the central town of the region. Olean grew quickly as a transportation hub for migrants taking the Allegany River into Ohio. For much of this era, Olean was larger and better known than its northern competitor, Buffalo. This period ended with the creation of the great canals, especially the Erie Canal in 1825.

Timber was a major industry in New York and Pennsylvania between 1830 and 1850, and Olean was the chief timber town in the region during those times. After river travel declined, Olean became the regional railroad hub. The town was the crossroads of several railroads, a situation which endures into today with the WNYP.

Olean was the home of several corporations. During the late 19th century, Olean had a few mills, a bicycle company, a manufacturer of mechanical pumps, and a glass works, among other factories. St. Bonaventure University was founded just outside of town in 1858. Olean was incorporated as a village in 1854, and as a city in 1893.

Oil was first discovered in the region by a French explorer in 1632, but it was rediscovered for commercial use during the Pennsylvania oil rush. Oil became the city's claim to fame for fifty years.

Olean was the railroad and pipeline hub for the surrounding oil region. The operations HQ of Standard Oil's New York affiliate, Socony, was based in the city. Oil produced on both sides of the state line (e.g. in Bradford, Pennsylvania) would be transported to Olean for rail travel. For a short time, Olean was the world's largest oil depot, complete with a "tank city" on the edge of town. A pipeline was also built linking the city to Standard Oil refineries in Bayonne, New Jersey. The oil industry maintained a presence in the city until 1954, the same year in which Olean's population peaked.

Oil also produced Olean's highest-ranking politician. Oil executive Frank W. Higgins was governor of New York in 1905-1907. Higgins' family owned grocery stores in the area, and Higgins also ran this business before his political career. To this day, Olean is one of the few smaller cities in New York State to be home to a governor.

Olean garnered notoriety as a major stop on bootlegging routes during Prohibition in 1920s. Dempsey, the Chief of Police, did not condone these thugs or their illegal activities. He did not aggressively pursue arrests, however, unless he had evidence the violator was responsible for a crime committed in his jurisdiction. As long as you kept your nose clean in the Olean City limits, it was a "safe haven". Local stories relating to this period are numerous. Some are documented and some are legends. Olean, located on a back road route between Chicago and New York City, was often frequented by famous mobsters of the era. Al Capone of Chicago, probably the most famous gang leader of the time, visited Olean in pursuance of his illegal endeavors. Olean was nicknamed "Little Chicago" in the press, due to its connection with mobsters and bootleggers, and Capone was a frequent visitor.[4]

There were 6,446 households out of which 29.1% had children under the age of 18 living with them, 42.0% were married couples living together, 13.2% had a female householder with no husband present, and 41.0% were non-families. 35.3% of all households were made up of individuals and 14.1% had someone living alone who was 65 years of age or older. The average household size was 2.29 and the average family size was 2.97.

In the city the population was spread out with 24.6% under the age of 18, 8.0% from 18 to 24, 27.2% from 25 to 44, 22.3% from 45 to 64, and 17.9% who were 65 years of age or older. The median age was 38 years. For every 100 females there were 88.1 males. For every 100 females age 18 and over, there were 84.3 males.

The median income for a household in the city was $30,400, and the median income for a family was $38,355. Males had a median income of $32,341 versus $22,469 for females. The per capita income for the city was $17,169. About 13.9% of families and 15.9% of the population were below the poverty line, including 20.5% of those under age 18 and 10.2% of those age 65 or over.

Bradner Stadium is a multi-purpose stadium which was once the home to the minor-league baseball teams the Olean Oilers, who played in the short-season Pony League, and the Olean Yankees, an earlier team. The stadium is now primarily the home for the Olean High School and Archbishop Walsh High School football teams.